U.S.'s Boehner stands firm against China currency bill

U.S. House Speaker John Boehner (R-OH) acknowledges a reporter during a news conference at the Capitol in Washington, September 22, 2011.

Reuters/Jonathan Ernst

WASHINGTON (Reuters) - A controversial U.S. bill aimed at forcing China to raise the value of the yuan has cleared the Senate but it looks likely to be shelved in the House of Representatives.

House Speaker John Boehner has made it clear he wants nothing to do with the legislation that has already raised heckles in Beijing.

And for now he seems to be in control despite loud protests including from within his own party.

Boehner, the most powerful Republican in Congress, denounced the bill again on Wednesday, a day after it passed the Senate, saying it posed a "very severe risk" of starting a trade war between the world's two biggest economies.

Democratic supporters of the bill are trying to turn up pressure on Boehner to allow a vote on the legislation. Top Democrats have said it is needed to curb China's "cheating" currency policy which already amounts to a trade war.

They also see the bill as a good way to show voters they share their concerns about high unemployment a year before congressional and presidential elections.

The Republican party, which usually rallies in support of freer trade, is divided on the matter. Presidential front-runner Mitt Romney has repeatedly said he would take China to task for its currency system if elected.

But so far those Republican lawmakers hoping to pressure Boehner into a U-turn appear to be too few to force him to allow a vote to take place.

If he ever does have to reverse position, the legislation would probably pass: 225 House lawmakers have signed up as co-sponsors, including 61 Republicans.

That would send it to the desk of President Barack Obama, putting him on the spot to veto legislation which he has suggested may breach world trade rules but which his Democratic Party overwhelmingly supports.

That prospect still looks remote.

No Republican lawmaker's name is on a so-called "discharge petition" -- a rarely successful congressional procedure -- that Democrats are trying to use to force Boehner to put the measure to a vote.

The only Republican who did recently sign up -- House Appropriations Committee Chairman Hal Rogers -- took his signature back just a day later. "It was an oversight on our end that was fixed," a spokeswoman for Rogers said.

That left 176 Democratic signatures on the petition, a long way short of the 218 needed to force the House leadership to allow a vote on the bill.

Other tactics may yet be tried. An attempt by Democrats on Wednesday to append the China currency bill to a free trade agreement with Colombia failed.

"On whether he (Boehner) can keep it from coming up, as a procedural matter, yes, as long as he can keep Republicans from signing the discharge petition, which thus far he has been able to do," said Bill Reinsch, president of the National Foreign Trade Council, which opposes the China currency legislation.

The most likely place to apply pressure would be in the House Ways and Means Committee where Republicans could decide to produce their own legislation on the subject, he said.

Such a move could defuse the current House push and keep any real action on China on the back-burner because new legislation would probably differ from the existing version and would have to go back to the Senate.

But so far, the head of the committee, Republican Dave Camp, has signaled no rush to start discussions of the existing bill. Camp said on Wednesday he would hold a hearing on a range of Chinese trade issues, including currency but also intellectual property rights, this month.

Some of the pressure for the China legislation in the House is coming from Republican lawmakers backed by the conservative force of the Tea Party, such as Representative Allen West.

It is unclear how many other lawmakers with Tea Party sympathies agree. A Pew Research Center report last week said Tea Party Republicans were much more supportive of taking a harder line with China in economic policy than other Republicans or Democrats.

Chris Chocola, president of the conservative Club for Growth which sees the punitive tariffs proposed by the currency bill as an unwanted new tax for Americans, said he did not think China was a rallying cry for Tea Party activists.

That meant it was unlikely they would press Boehner on China with the same intensity as they did in July and August to make more spending cuts in talks with the White House on the U.S. debt ceiling.

Representative Dana Rohrabacher, a Republican who supports the China currency legislation and is not a member of the Tea Party caucus, said there was a division in his party about free trade and what limits should be placed on it.

"Speaker Boehner is taking the traditional Republican position, and maybe at some point you have to re-examine whether or not that tradition is working for the benefit of our country under current circumstances," he told Reuters.

"If you permit unfair trading rules ... to cause a transfer of wealth or jobs to another country, you are not doing our people any good," Rohrabacher said.